It is always nice to buy a stock you want at a cheap price, but this is often not possible. What is possible is to buy at a reasonable price. To me a reasonable price is when the ratio I am looking at is at least below the high median value. However, a better price is when a ratio is at or below the median ratio.
For Richelieu Hardware Ltd I wrote "I have 5 year low, median and high median Price/Earnings per Share Ratios of 15.46, 18.11 and 20.76. These are higher than the corresponding 10 year P/E Ratios of 14.03, 15.47 and 16.94. The historical median P/E Ratios is even lower at 14.49. The current P/E Ratio is 21.29. This is based on a stock price of $22.99 and 2016 EPS estimate of $1.08. This stock price testing suggests that the stock price is relatively high."
If the current P/E was at or below 14.49, then the stock is definitely cheap. It is possibly cheap below 15.46, which is really not that much higher. If a stock is cheap, is it cheap for a reason or is it because the whole market or the sector of this company also relatively low? This is always worth investigating when a stock is cheap.
If stock is cheap because of the latter reasons, then it is a buy. If it is cheap for a reason, you have to explore more carefully why it is cheap and how current problems will affect the long term viability of the company. If the company is having problem because of recession, you can look at how it has handled recession previously. Good debt ratios especially a good Liquidity Ratio can really help here.
If the current P/E Ratios are at or below 15.47 and possibly at or below 18.11 then the price is probably reasonable and below the median. This could be a good entry point. If the P/E Ratio is above 20.76 it is definitely expensive.
The P/E Ratios could be rising on this stock because it is getting bigger (higher market cap) or because the general stock market's P/E Ratio is rising. For this stock, it probably is a bit of both.
None of this is an exact science, of course. Investing is more art than science. Investing is like Life. It is messy and there are no clear cut answers.
On my other blog I wrote yesterday about AltaGas Ltd (TSX-ALA, OTC-ATGFF)... learn more. Tomorrow, I will write about BCE Inc. (TSX-BCE, NYSE-BCE)... learn more on Friday, April 1 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Thursday, March 31, 2016
Tuesday, March 29, 2016
Stock Ratios
It is as if all stocks have their own currency. A stock priced at $20.00 could be more expensive than a stock priced at $70.00. Prices are relative. What you need to use to see if a stock is cheap, reasonable or expensive is to compare the stock price relative to some other value.
One of the most popular methods is to compare Price/Earnings per Share (P/E) Ratios. Other ones I use is Price/Graham Price (P/GP) Ratio, Price/Book Value per Share (P/B) Ratio, Price/Cash Flow per Share (P/CF) Ratios, Price/Sales or Revenue (P/S) Ratio and Dividend Yield.
P/E Ratios are relative to different sorts of stocks. Generally speaking a P/E below 10 says that the stock is cheap and one over 30 says it is expensive. However, you can have a very high P/E on a fast growing stock and make lots of money when the stock has momentum.
The P/E Ratio I use in my stock tests is the forward P/E Ratio. That is I am using the EPS estimates to calculate the P/E Ratio. I compare this P/E Ratio to the 5 year low, median and high median P/E Ratios I have in my spreadsheet for a particular stock. I often look at the corresponding 10 year values to see what way P/E Ratios are trending. Sometimes I look at historical values, if I have them.
Sometimes in place of the P/E Ratio, I used Price/Funds from Operations (FFO) Ratio or Price/Adjusted Funds from Operations (AFFO) Ratio. This is especially true for REIT companies. These ratios are like P/E Ratio where I compare 5 or 10 year low, median and high median ratios to a current one based on price and forward FFO or AFFO.
The P/B Ratio is also a common ratio to look at. I look at the 10 year median P/B Ratio. The current one uses the latest Book Value per Share and the current stock price. If the P/B Ratio is 80% of the 10 year median ratio, it shows that the current stock price is cheap. If the current P/B Ratio is around the same as the 10 year median P/B Ratio, then the current stock price is reasonable.
For the P/B Ratio a ratio at 1.50 or below is considered to show that the stock price is on the cheap side. If the P/B Ratio is below 1.00, it implies that the breakup value of the company is higher than the current stock price.
I have previously written about the Graham Price . This calculation is trying to come up with what would be a good price to pay for a stock. It uses both the EPS and Book Value in the calculation. So basically, a P/GP Ratio of 1.00 or below would be ideal. However, some stocks you would like to buy never get to a 1.00 ratio.
What I do is look at the 10 year low, median and high median P/GP Ratios and compare this to the current P/GP Ratio I calculated. Basically, I want a current P/GP Ratio that is at or below the 10 year median P/GP Ratio. A relatively cheap stock would be one where the current P/GP Ratio is at or lower than the 10 year low median P/GP Ratio.
Another common Stock Price Ratio is the Price/Cash Flow per Share Ratio (P/CF Ratio). Here I use a 10 year median P/CF Ratio and compare it to the P/CF Ratio using the current stock price and the forward CFPS which is CFPS estimate for the next year if available. If not I can look at the CFPS of the past 12 months.
At the first of every month I go into check stock prices by dividend yield, so I will not go into details here about this.
On my other blog I wrote on Friday about TransCanada Corp. (TSX-TRP, NYSE-TRP)... learn more Tomorrow, I will write about AltaGas Ltd (TSX-ALA, OTC-ATGFF)... learn more on Wednesday, March 30, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Golden Age Shtetl by Yohanan Petrovsky-Shtern. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
One of the most popular methods is to compare Price/Earnings per Share (P/E) Ratios. Other ones I use is Price/Graham Price (P/GP) Ratio, Price/Book Value per Share (P/B) Ratio, Price/Cash Flow per Share (P/CF) Ratios, Price/Sales or Revenue (P/S) Ratio and Dividend Yield.
P/E Ratios are relative to different sorts of stocks. Generally speaking a P/E below 10 says that the stock is cheap and one over 30 says it is expensive. However, you can have a very high P/E on a fast growing stock and make lots of money when the stock has momentum.
The P/E Ratio I use in my stock tests is the forward P/E Ratio. That is I am using the EPS estimates to calculate the P/E Ratio. I compare this P/E Ratio to the 5 year low, median and high median P/E Ratios I have in my spreadsheet for a particular stock. I often look at the corresponding 10 year values to see what way P/E Ratios are trending. Sometimes I look at historical values, if I have them.
Sometimes in place of the P/E Ratio, I used Price/Funds from Operations (FFO) Ratio or Price/Adjusted Funds from Operations (AFFO) Ratio. This is especially true for REIT companies. These ratios are like P/E Ratio where I compare 5 or 10 year low, median and high median ratios to a current one based on price and forward FFO or AFFO.
The P/B Ratio is also a common ratio to look at. I look at the 10 year median P/B Ratio. The current one uses the latest Book Value per Share and the current stock price. If the P/B Ratio is 80% of the 10 year median ratio, it shows that the current stock price is cheap. If the current P/B Ratio is around the same as the 10 year median P/B Ratio, then the current stock price is reasonable.
For the P/B Ratio a ratio at 1.50 or below is considered to show that the stock price is on the cheap side. If the P/B Ratio is below 1.00, it implies that the breakup value of the company is higher than the current stock price.
I have previously written about the Graham Price . This calculation is trying to come up with what would be a good price to pay for a stock. It uses both the EPS and Book Value in the calculation. So basically, a P/GP Ratio of 1.00 or below would be ideal. However, some stocks you would like to buy never get to a 1.00 ratio.
What I do is look at the 10 year low, median and high median P/GP Ratios and compare this to the current P/GP Ratio I calculated. Basically, I want a current P/GP Ratio that is at or below the 10 year median P/GP Ratio. A relatively cheap stock would be one where the current P/GP Ratio is at or lower than the 10 year low median P/GP Ratio.
Another common Stock Price Ratio is the Price/Cash Flow per Share Ratio (P/CF Ratio). Here I use a 10 year median P/CF Ratio and compare it to the P/CF Ratio using the current stock price and the forward CFPS which is CFPS estimate for the next year if available. If not I can look at the CFPS of the past 12 months.
At the first of every month I go into check stock prices by dividend yield, so I will not go into details here about this.
On my other blog I wrote on Friday about TransCanada Corp. (TSX-TRP, NYSE-TRP)... learn more Tomorrow, I will write about AltaGas Ltd (TSX-ALA, OTC-ATGFF)... learn more on Wednesday, March 30, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Golden Age Shtetl by Yohanan Petrovsky-Shtern. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Thursday, March 24, 2016
No Feminist Here
I probably disqualify myself immediately to be a feminist because I do not believe in socialism. I am a capitalist. If it wasn't for capitalism we would still be scratching in the dirt for our living rather than living a better life than any other people at any time in history. Of course, I live in Canada where this is true. I realize that in other countries people live very tough lives.
Capitalism has provided the means for us to live very good lives. It has also provided the means for us to provide things that are for the common good. If a country is filled with health and well education people, it is to the benefit of all the people in a country. That is why government services are a necessity.
I have never felt that I could not accomplish whatever I wanted to accomplish. I must admit that I got that attitude from my father rather than my mother. My mother was a stay at home mother and she thought that her daughters to be fulfilled should marry and have children. I did that eventually (at age 40), but I was not the sort of girl that grew up dreaming of getting married.
We have a new Prime Minister in Canada who talks a lot of about feminism. He is making a big fuss about have a lot of women in his cabinet. I have always found it a bit amusing when men call themselves feminist. Having equal number of men and women as ministers is just equality if equal number of qualified men and women want to be ministers.
Is it a Topsy Turvy world because men say that they are feminist, but women do not?
On my other blog I wrote yesterday about TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more. Tomorrow, I will write about TransCanada Corp. (TSX-TRP, NYSE-TRP)... learn more on Friday, March 25, 2016 around 5 pm.
Also, on my book blog I have put a review of the book Doomed to Repeat by Bill Fawcett. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Capitalism has provided the means for us to live very good lives. It has also provided the means for us to provide things that are for the common good. If a country is filled with health and well education people, it is to the benefit of all the people in a country. That is why government services are a necessity.
I have never felt that I could not accomplish whatever I wanted to accomplish. I must admit that I got that attitude from my father rather than my mother. My mother was a stay at home mother and she thought that her daughters to be fulfilled should marry and have children. I did that eventually (at age 40), but I was not the sort of girl that grew up dreaming of getting married.
We have a new Prime Minister in Canada who talks a lot of about feminism. He is making a big fuss about have a lot of women in his cabinet. I have always found it a bit amusing when men call themselves feminist. Having equal number of men and women as ministers is just equality if equal number of qualified men and women want to be ministers.
Is it a Topsy Turvy world because men say that they are feminist, but women do not?
On my other blog I wrote yesterday about TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more. Tomorrow, I will write about TransCanada Corp. (TSX-TRP, NYSE-TRP)... learn more on Friday, March 25, 2016 around 5 pm.
Also, on my book blog I have put a review of the book Doomed to Repeat by Bill Fawcett. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Tuesday, March 22, 2016
Do Not Muck About
If you live off your dividends the way I do, what you should remember is not to muck about trading too much. You should buy your stocks for the longer term and do little in the way of trading. I have little trouble living off my dividends.
I have talked to people who are depending on dividend income or wanting to build an income portfolio and are constantly worried about their portfolio. They buy and sell to get the right stocks and therefore are constantly changing the makeup of their portfolio. They do not seem to progress as quickly or as well as I did. I leave mine portfolio alone.
When I was building my portfolio and now living off it, I just buy. I only sell when I really had to. I could not touch my portfolio for 6 months or a year and nothing much would happen. I have done that in the past when I was building my portfolio and had other things I had to do.
Not all I bought were winners of course. I would try out different stocks to see how they worked. Often when they did not work all that well, but were still producing income I just left them and moved on to different stock. So I do have some bits and pieces of shares but overall, the portfolio is doing what it should. That is producing an growing income for me.
You are not going to have a perfect portfolio. I certainly do not. However, nothing much is happening in my portfolio. It gets me through good times and bad times. Some stocks do better than others. Every time there is a bear market, some stock will cut its dividend. However, others will not and some will increase their dividends. It is often hard to tell years in advance how stocks will do. But you can do greater damage to your dividend portfolio by always changing it then leaving it alone.
No matter what you do you do, if you invest in stocks you will have winners and losers. If you accept this, you might do better at investing. You may not get a perfect portfolio, but you can get a reasonably acceptable one.
I wrote yesterday about Melcor Developments Inc. (TSX-MRD, OTC-MODVF)...learn more. Tomorrow, I will write about TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more on Wednesday, March 23, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Hidden Half of Nature by Montgomery and Bikle. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
I have talked to people who are depending on dividend income or wanting to build an income portfolio and are constantly worried about their portfolio. They buy and sell to get the right stocks and therefore are constantly changing the makeup of their portfolio. They do not seem to progress as quickly or as well as I did. I leave mine portfolio alone.
When I was building my portfolio and now living off it, I just buy. I only sell when I really had to. I could not touch my portfolio for 6 months or a year and nothing much would happen. I have done that in the past when I was building my portfolio and had other things I had to do.
Not all I bought were winners of course. I would try out different stocks to see how they worked. Often when they did not work all that well, but were still producing income I just left them and moved on to different stock. So I do have some bits and pieces of shares but overall, the portfolio is doing what it should. That is producing an growing income for me.
You are not going to have a perfect portfolio. I certainly do not. However, nothing much is happening in my portfolio. It gets me through good times and bad times. Some stocks do better than others. Every time there is a bear market, some stock will cut its dividend. However, others will not and some will increase their dividends. It is often hard to tell years in advance how stocks will do. But you can do greater damage to your dividend portfolio by always changing it then leaving it alone.
No matter what you do you do, if you invest in stocks you will have winners and losers. If you accept this, you might do better at investing. You may not get a perfect portfolio, but you can get a reasonably acceptable one.
I wrote yesterday about Melcor Developments Inc. (TSX-MRD, OTC-MODVF)...learn more. Tomorrow, I will write about TransAlta Corp. (TSX-TA, NSYE-TAC)... learn more on Wednesday, March 23, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Hidden Half of Nature by Montgomery and Bikle. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Thursday, March 17, 2016
Canadian Banks
This article for Advice for Investors is talking about Canadian Banks. I follow most the big banks except for CIBC and of the smaller ones, I follow the National Bank. Although this article is a few months old, I think that what they are talking about is relevant today.
I think that currently all the banks I follow, expect for the Bank of Montreal are selling at good prices. This showed up in my monthly "Something to Buy for March 2016" article and spreadsheet. See my spreadsheet here. For Canadians any dividend portfolio should have at least 2 Canadian Banks. They are good dividend payers and generally give good dividend growth.
The last stock I wrote about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more. The next stock I will write about will be Enbridge Inc. (TSX-ENB, NYSE-ENB)... learn more on Friday, March 18, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
I think that currently all the banks I follow, expect for the Bank of Montreal are selling at good prices. This showed up in my monthly "Something to Buy for March 2016" article and spreadsheet. See my spreadsheet here. For Canadians any dividend portfolio should have at least 2 Canadian Banks. They are good dividend payers and generally give good dividend growth.
The last stock I wrote about was Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more. The next stock I will write about will be Enbridge Inc. (TSX-ENB, NYSE-ENB)... learn more on Friday, March 18, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Tuesday, March 15, 2016
TFSA
Want the low down on Tax Fee Savings Accounts? MPL Communications put out a very good article on these accounts recently. It also points out that calling them “Savings Accounts” was a very bad idea. It has led to lots of people misunderstanding them.
Personally, I think that if you want to save for retirement and you are not in the top tax bracket, you might be much better off with one of these accounts than RRSP accounts.
The last stock I wrote about was Canadian Tire Corp. (TSX-CTC.A, OTC-CDNAF)... learn more. The next stock I will write about will be Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more on Wednesday, March 16, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Knowledge by Lewis Dartnell learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Personally, I think that if you want to save for retirement and you are not in the top tax bracket, you might be much better off with one of these accounts than RRSP accounts.
The last stock I wrote about was Canadian Tire Corp. (TSX-CTC.A, OTC-CDNAF)... learn more. The next stock I will write about will be Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more on Wednesday, March 16, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Knowledge by Lewis Dartnell learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Thursday, March 10, 2016
Something to Buy March 2016
There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.
The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.
For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.
However, no system is perfect. But if you are interested in buy a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet here to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).
I follow 18 stocks in the Consumer Discretionary category. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Eight (or 44%) are showing cheap by historical median dividend yield. They are Canadian Tire Corporation (TSX-CTC.A); Dorel Industries (TSX-DII.B), High Liner Foods (TSX-HLF); Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A), Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI). Newfoundland Capital Corp is an addition for this month.
I follow 10 Consumer Staples stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 20%) are showing cheap by historical median dividend yield. These are Jean Coutu Group Inc. (TSX-PJC.A) and Loblaw Companies (TSX-L). This is the same as for last month.
I only follow two Health Care stocks and both are US stocks. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.
I follow 12 Real Estate stocks. Melcor Developments Inc. (TSX-MRD) is showing as cheap by the historically high dividend yield. Five stocks (or 42%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) H & R Real Estate Inv. Trust (TSX-HR.UN) and Melcor Developments Inc. (TSX-MRD). This is the same as for last month.
I follow 7 Bank stocks. None are showing as cheap by the historically high dividend yield. Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD). Home Capital Group is new to this list this month and it is now classified as a Bank rather than in Financial Services. Last month his company was also showing as cheap by historically high dividend yield.
I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B); CI Financial (TSX-CIX); DirectCash Payments Inc. (TSX-DCI); Equitable Group Inc. (TSX-EQB), Gluskin Sheff + Associates Inc. (TSX-GS); IGM Financial (TSX-IGM); Power Corp (TSX-POW) and TMX Group Ltd. (TSX-X). This is the same as for last month.
I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change from last month.
I follow 34 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.
I have 6 Construction stocks. None are cheap by the historically high dividend yield. Four stocks or 67% are showing as cheap by historical median dividend yield. They are Bird Construction Inc. (TSX-BTD), SNC-Lavalin (TSX-SNC), Stantec Inc. (TSX-STN, NYSE-STN) and Toromont Industries Ltd. (TSX-TIH). Last month Stantec Inc. was also showing as cheap by historically high dividend yield.
I have 6 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT), Methanex Corp. (TSX-MX), and Russel Metals (TSX-RUS). Last month Finning International Inc. was also showing as cheap by the historically high dividend yield.
I have 9 Manufacturing stocks. One is cheap by the historically high dividend yield. That stock is Hammond Power Solutions Inc. (TSX-HPS.A). Two stocks or 22% are showing as cheap by historical median dividend yield. They are Ag Growth International (TSX-AFN) and Hammond Power Solutions Inc. (TSX-HPS.A). There is no change from last month.
I have 15 Services stocks. One is showing as cheap by the historically high dividend yield. That stock is Pason Systems Inc. (TSX-PSI). Five stocks or 40% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR); HNZ Group Inc. (TSX-HNZ.A); Mullen Group (TSX-MTL); and Transcontinental Inc. (TSX-TCL.A). Pulse Seismic Inc. (TSX-PSD) is no longer on this list as it has suspended its dividend.
I follow 10 Energy stocks. Four Stocks or (40%) are showing as cheap by the historical high dividend yield. They are Canadian Natural Resources (TSX-CNQ); Ensign Energy Services (TSX-ESI); Husky Energy (TSX-HSE) and Suncor Energy (TSX-SU). There are four stocks (or 40%) showing cheap by historical median dividend yield. They are the four above. Encana Corp. (TSX-ECA) and Cenovus Energy Inc. (TSX-CVE) are removed because they have cut their dividends.
I follow 3 Material stocks. None are showing as cheap by the historically high dividend yield. None are cheap by historical median dividend yield. Teck Resources Ltd. (TSX-TCK.B) was showing cheap by historical median dividend yield last month.
I follow 8 Tech stocks. None are showing as cheap by historical median dividend yield. Four stocks (or 50%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT); Calian Technologies Ltd (TSX-CTY), Computer Modelling Group Ltd. (TSX-CMG) and Evertz Technologies (TSX-ET). There is no change from last month.
I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Four stocks (or 50%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF); Enbridge Inc. (TSX-ENB, NYSE-ENB), TransCanada Corp (TSX-TRP, NYSE-TRP) and Veresen Inc. (TSX-VSN, OTC-FCGYF). TransCanada Corp (TSX-TRP) was added to this list.
I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by historical median dividend yield. They are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Fortis Inc. (TSX-FTS, OTC-FRTSF)/
I follow 5 of the Telecom Service type utility companies. One stock is showing cheap by the historical high dividend yield and that is Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE); Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). This has not changed from last month.
On my other blog I wrote yesterday about RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more. Tomorrow, I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF)... learn more on Friday, March 11, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.
For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.
However, no system is perfect. But if you are interested in buy a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet here to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).
I follow 18 stocks in the Consumer Discretionary category. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Eight (or 44%) are showing cheap by historical median dividend yield. They are Canadian Tire Corporation (TSX-CTC.A); Dorel Industries (TSX-DII.B), High Liner Foods (TSX-HLF); Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A), Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI). Newfoundland Capital Corp is an addition for this month.
I follow 10 Consumer Staples stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 20%) are showing cheap by historical median dividend yield. These are Jean Coutu Group Inc. (TSX-PJC.A) and Loblaw Companies (TSX-L). This is the same as for last month.
I only follow two Health Care stocks and both are US stocks. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.
I follow 12 Real Estate stocks. Melcor Developments Inc. (TSX-MRD) is showing as cheap by the historically high dividend yield. Five stocks (or 42%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) H & R Real Estate Inv. Trust (TSX-HR.UN) and Melcor Developments Inc. (TSX-MRD). This is the same as for last month.
I follow 7 Bank stocks. None are showing as cheap by the historically high dividend yield. Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD). Home Capital Group is new to this list this month and it is now classified as a Bank rather than in Financial Services. Last month his company was also showing as cheap by historically high dividend yield.
I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B); CI Financial (TSX-CIX); DirectCash Payments Inc. (TSX-DCI); Equitable Group Inc. (TSX-EQB), Gluskin Sheff + Associates Inc. (TSX-GS); IGM Financial (TSX-IGM); Power Corp (TSX-POW) and TMX Group Ltd. (TSX-X). This is the same as for last month.
I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change from last month.
I follow 34 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.
I have 6 Construction stocks. None are cheap by the historically high dividend yield. Four stocks or 67% are showing as cheap by historical median dividend yield. They are Bird Construction Inc. (TSX-BTD), SNC-Lavalin (TSX-SNC), Stantec Inc. (TSX-STN, NYSE-STN) and Toromont Industries Ltd. (TSX-TIH). Last month Stantec Inc. was also showing as cheap by historically high dividend yield.
I have 6 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT), Methanex Corp. (TSX-MX), and Russel Metals (TSX-RUS). Last month Finning International Inc. was also showing as cheap by the historically high dividend yield.
I have 9 Manufacturing stocks. One is cheap by the historically high dividend yield. That stock is Hammond Power Solutions Inc. (TSX-HPS.A). Two stocks or 22% are showing as cheap by historical median dividend yield. They are Ag Growth International (TSX-AFN) and Hammond Power Solutions Inc. (TSX-HPS.A). There is no change from last month.
I have 15 Services stocks. One is showing as cheap by the historically high dividend yield. That stock is Pason Systems Inc. (TSX-PSI). Five stocks or 40% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR); HNZ Group Inc. (TSX-HNZ.A); Mullen Group (TSX-MTL); and Transcontinental Inc. (TSX-TCL.A). Pulse Seismic Inc. (TSX-PSD) is no longer on this list as it has suspended its dividend.
I follow 10 Energy stocks. Four Stocks or (40%) are showing as cheap by the historical high dividend yield. They are Canadian Natural Resources (TSX-CNQ); Ensign Energy Services (TSX-ESI); Husky Energy (TSX-HSE) and Suncor Energy (TSX-SU). There are four stocks (or 40%) showing cheap by historical median dividend yield. They are the four above. Encana Corp. (TSX-ECA) and Cenovus Energy Inc. (TSX-CVE) are removed because they have cut their dividends.
I follow 3 Material stocks. None are showing as cheap by the historically high dividend yield. None are cheap by historical median dividend yield. Teck Resources Ltd. (TSX-TCK.B) was showing cheap by historical median dividend yield last month.
I follow 8 Tech stocks. None are showing as cheap by historical median dividend yield. Four stocks (or 50%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT); Calian Technologies Ltd (TSX-CTY), Computer Modelling Group Ltd. (TSX-CMG) and Evertz Technologies (TSX-ET). There is no change from last month.
I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Four stocks (or 50%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF); Enbridge Inc. (TSX-ENB, NYSE-ENB), TransCanada Corp (TSX-TRP, NYSE-TRP) and Veresen Inc. (TSX-VSN, OTC-FCGYF). TransCanada Corp (TSX-TRP) was added to this list.
I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by historical median dividend yield. They are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Fortis Inc. (TSX-FTS, OTC-FRTSF)/
I follow 5 of the Telecom Service type utility companies. One stock is showing cheap by the historical high dividend yield and that is Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE); Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). This has not changed from last month.
On my other blog I wrote yesterday about RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more. Tomorrow, I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF)... learn more on Friday, March 11, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Wednesday, March 9, 2016
Inflation Coming Soon
There is a recent article on Value Walk by Michelle Jones. She entitles her article "Inflation Coming Soon: David Rosenberg Running with the Bulls". David Rosenberg is Gluskin Sheff's Chief Economist and someone to pay attention to. I thought this article was worthwhile pointing out.
On my other blog I am writing about RioCan Real Estate (TSX-REI.UN, OTC-RIOCF)... learn more...
Also, on my book blog I have put a review of the book Flash Points by George Friedman learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
On my other blog I am writing about RioCan Real Estate (TSX-REI.UN, OTC-RIOCF)... learn more...
Also, on my book blog I have put a review of the book Flash Points by George Friedman learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Tuesday, March 8, 2016
Dividend Stocks March 2016
First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for March 2016. On this list,
Bank of Nova Scotia (TSX-BNS, NYSE-BNS)
BCE (TSX-BCE, NYSE-BCE)
Brookfield Asset Management (TSX-BAM.A, NYSE-BAM)
CCL Industries (TSX-CCL.B, OTC-CCDBF)
Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)
FirstService Corp. (TSX-FSV, NASDAQ-FSV)
Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)
Home Capital Group (TSX-HCG, OTC-HMCBF)
Innergex Renewable Energy (TSX-INE, OTC-INGXF)
Intact Financial Corp. (TSX-IFC, OTC-IFCZF)
Magna International Inc. (TSX-MG, NYSE-MGA)
Manulife Financial Corp (TSX-MFC, NYSE-MFC)
Royal Bank (TSX-RY, NYSE-RY)
Stantec Inc. (TSX-STN, NYSE-STN)
Thomson Reuters Corp (TSX-TRI, NYSE-TRI)
Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)
Toronto Dominion Bank (TSX-TD, NYSE-TD)
TransCanada Corp (TSX-TRP, NYSE-TRP)
For Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI) both TD Bank's WebBroker and G&M Investor site says that the dividend on this stock is now $0.22 USD. However, I cannot find anything from Colliers to support this. The most recent news I find is the decrease in dividends to $0.08 USD. The company has said that they will in the future be able to give good dividend increases.
I have kept the dividend at $0.08 USD as I have found in the past that sometimes these sites can be wrong for various reasons. Other sites are quoting a yield of 0.02%, which implies a dividend of $0.08 USD. I have denoted this dividend in light purple.
I am also unsure of what the dividends will be for Barclays PLC (LSE-BARC, NYSE-BCS). They are changing the dividends back to semi-annual from quarterly. They have always had one large dividends usually paid at the beginning of the year and the others were much smaller. The large dividend at the beginning of the year was declared at the end of the previous year and reflected how well the bank did for that year.
If they again pay a smaller dividend at the end of the year then the dividends would be decreased. However, I do not know what they are going to do. On the other hand, the bank says that they expect to pay out a significant proportion of earnings in dividends to shareholders in the longer term.
Of the stocks I follow Richelieu Hardware Ltd. (TSX-RCH, OTC-RHUHF) have split their shares 3 for 1.
Of the stocks that I follow 3 companies have decreased their dividends. I have denoted these dividends in red. The stocks are shown below.
ARC Resources Ltd. (TSX-ARX, OTC-AETUF)
Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)
Encana Corp. (TSX- ECA, OTC-ECA)
Of the stocks that I follow 2 companies have suspended their dividends. I have denoted these dividends in red. The stocks are shown below.
Penn West Petroleum (TSX-PWT, NYSE-PWE)
Pulse Seismic Inc. (TSX-PSD, OTC-PLSDF)
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.
On my other blog I wrote yesterday about Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF)... learn more. Tomorrow, I will write about will be RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more on Wednesday, March 9, 2016 around 5 pm.
Also, on my book blog I have put a review of the book 100 Million Years of Food by Stephen Le, learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for March 2016. On this list,
- I have 9 stocks with a dividend yield higher than the historical high dividend yield,
- I have 45 stocks with a dividend yield higher than the historical average dividend yield
- I have 68 stocks with a dividend yield higher than the historical median dividend yield and
- 65 stocks with a dividend yield higher than the 5 year average dividend yield.
- I have 12 stocks with a dividend yield higher than the historical high dividend yield,
- I have 49 stocks with a dividend yield higher than the historical average dividend yield
- I have 67 stocks with a dividend yield higher than the historical median dividend yield and
- 73 stocks with a dividend yield higher than the 5 year average dividend yield.
- I had 9 stocks with a dividend yield higher than the historical high dividend yield,
- I had 45 stocks with a dividend yield higher than the historical average dividend yield and
- 39 stocks with a dividend yield higher than the 5 year average dividend yield.
Bank of Nova Scotia (TSX-BNS, NYSE-BNS)
BCE (TSX-BCE, NYSE-BCE)
Brookfield Asset Management (TSX-BAM.A, NYSE-BAM)
CCL Industries (TSX-CCL.B, OTC-CCDBF)
Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)
FirstService Corp. (TSX-FSV, NASDAQ-FSV)
Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)
Home Capital Group (TSX-HCG, OTC-HMCBF)
Innergex Renewable Energy (TSX-INE, OTC-INGXF)
Intact Financial Corp. (TSX-IFC, OTC-IFCZF)
Magna International Inc. (TSX-MG, NYSE-MGA)
Manulife Financial Corp (TSX-MFC, NYSE-MFC)
Royal Bank (TSX-RY, NYSE-RY)
Stantec Inc. (TSX-STN, NYSE-STN)
Thomson Reuters Corp (TSX-TRI, NYSE-TRI)
Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)
Toronto Dominion Bank (TSX-TD, NYSE-TD)
TransCanada Corp (TSX-TRP, NYSE-TRP)
For Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI) both TD Bank's WebBroker and G&M Investor site says that the dividend on this stock is now $0.22 USD. However, I cannot find anything from Colliers to support this. The most recent news I find is the decrease in dividends to $0.08 USD. The company has said that they will in the future be able to give good dividend increases.
I have kept the dividend at $0.08 USD as I have found in the past that sometimes these sites can be wrong for various reasons. Other sites are quoting a yield of 0.02%, which implies a dividend of $0.08 USD. I have denoted this dividend in light purple.
I am also unsure of what the dividends will be for Barclays PLC (LSE-BARC, NYSE-BCS). They are changing the dividends back to semi-annual from quarterly. They have always had one large dividends usually paid at the beginning of the year and the others were much smaller. The large dividend at the beginning of the year was declared at the end of the previous year and reflected how well the bank did for that year.
If they again pay a smaller dividend at the end of the year then the dividends would be decreased. However, I do not know what they are going to do. On the other hand, the bank says that they expect to pay out a significant proportion of earnings in dividends to shareholders in the longer term.
Of the stocks I follow Richelieu Hardware Ltd. (TSX-RCH, OTC-RHUHF) have split their shares 3 for 1.
Of the stocks that I follow 3 companies have decreased their dividends. I have denoted these dividends in red. The stocks are shown below.
ARC Resources Ltd. (TSX-ARX, OTC-AETUF)
Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)
Encana Corp. (TSX- ECA, OTC-ECA)
Of the stocks that I follow 2 companies have suspended their dividends. I have denoted these dividends in red. The stocks are shown below.
Penn West Petroleum (TSX-PWT, NYSE-PWE)
Pulse Seismic Inc. (TSX-PSD, OTC-PLSDF)
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.
On my other blog I wrote yesterday about Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF)... learn more. Tomorrow, I will write about will be RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more on Wednesday, March 9, 2016 around 5 pm.
Also, on my book blog I have put a review of the book 100 Million Years of Food by Stephen Le, learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Thursday, March 3, 2016
Low Dividend Stock
When I was reviewing Metro Inc. (TSX-MRU, OTC-MTRAF) it made me think about the writers who say that when investing in dividend paying stock, it is best to choose ones with high dividend yields. This is a stock I have it for just over 11 years. I have made a total return of 19.92% per year on this stock.
If I look at my total returns, 92.6% is capital gains and just 7.4% is in dividends. The thing with low dividends is that you are more likely to get good dividend increases and this can help you grow your dividend income nicely.
For this stock the 5 and 10 years dividend growth is 15.8% and 13.37%. The most recent dividend increase is at 19.2%. I am earnings some 9.5% dividend yield on my original purchase price. Also dividends received to date have covered some 45.6% of the purchase price of this stock. However, I am earning just 1.3% on the current value of this stock.
Of course, I can sell some shares and pay capital gains tax on the increase of capital in this stock. Capital gains tax is relatively low compared to dividend tax. I am not ready to do that just yet, but it is a viable option.
Because higher dividend yields tend to come with lower dividend increases and lower dividend yields tend to come with higher dividend increases, I look at this as just another trade-off. So I have low, medium and high dividend yield stocks with high, medium and low dividend growth potential. I say dividend growth potential because there is not exact matchup between dividend yield and dividend growth.
I just bought Gluskin Sheff + Associates Inc. (TSX:-GS, OTC-GLUSF) which had both a good dividend yield of 4.4% and good growth at 12.1% and 14% per year over the past 5 and 8 years. On the other hand this stock has very low growth in its stock price, mainly because the stock price has gone up and down a lot. This stock also gives out a special dividend every year, so it will be interesting to see where this stock goes in the future.
On my other blog I wrote yesterday about Home Capital Group (TSX-HCG, OTC- HMCBF)... learn more. Tomorrow, I will write about Canadian Real Estate Investment Trust (TSX-REF.UN, OTC- CRXIF)... learn more on Friday, March 4, 2016.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
If I look at my total returns, 92.6% is capital gains and just 7.4% is in dividends. The thing with low dividends is that you are more likely to get good dividend increases and this can help you grow your dividend income nicely.
For this stock the 5 and 10 years dividend growth is 15.8% and 13.37%. The most recent dividend increase is at 19.2%. I am earnings some 9.5% dividend yield on my original purchase price. Also dividends received to date have covered some 45.6% of the purchase price of this stock. However, I am earning just 1.3% on the current value of this stock.
Of course, I can sell some shares and pay capital gains tax on the increase of capital in this stock. Capital gains tax is relatively low compared to dividend tax. I am not ready to do that just yet, but it is a viable option.
Because higher dividend yields tend to come with lower dividend increases and lower dividend yields tend to come with higher dividend increases, I look at this as just another trade-off. So I have low, medium and high dividend yield stocks with high, medium and low dividend growth potential. I say dividend growth potential because there is not exact matchup between dividend yield and dividend growth.
I just bought Gluskin Sheff + Associates Inc. (TSX:-GS, OTC-GLUSF) which had both a good dividend yield of 4.4% and good growth at 12.1% and 14% per year over the past 5 and 8 years. On the other hand this stock has very low growth in its stock price, mainly because the stock price has gone up and down a lot. This stock also gives out a special dividend every year, so it will be interesting to see where this stock goes in the future.
On my other blog I wrote yesterday about Home Capital Group (TSX-HCG, OTC- HMCBF)... learn more. Tomorrow, I will write about Canadian Real Estate Investment Trust (TSX-REF.UN, OTC- CRXIF)... learn more on Friday, March 4, 2016.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Tuesday, March 1, 2016
Portfolio and SPY
I was asked to share my portfolio and how it matched up with returns on SPY (which is SPDR S&P 500 ETF). In the table below I have shown in the To Date column my total return from December 31, 2015 to January 31, 2016. For the 5 year periods I am doing the calculations using XIRR in excel using data from December 31, 2010 and December 31.2015. For the 10 year periods I am doing the calculations using XIRR in excel using data from December 31, 2005 and December 31, 2015.
The first line includes the money I have withdrawn. I withdraw money every month from my portfolio as I am living off my portfolio. In my calculations I am assuming that all the withdrawals occur on June 30 of each year as I withdrawal a similar amount each month.
I have some 51 stocks and 6 other items. I have a reserve fund in Tangerine. I do not have any medical or dental coverage and this is the reason I need a reserve fund. Also, I use it for large unexpected expenses. I have CIGs in my registered accounts as I have been taking money from these accounts. In these accounts I have cash or near cash and expected dividends that cover me for 5 years of withdrawals. All my investments are shown here.
Even though I have many investment items, there are some 20 stocks that make up some 77% of my total investments. These stocks are shown below.
On my other blog I wrote yesterday about Mullen Group Ltd. (TSX-MTL, OTC- MLLGF)... learn more. Tomorrow, I will write about Home Capital Group (TSX-HCG, OTC- HMCBF)... learn more on Wednesday, March 2, 2016 date.
Also, on my book blog I have put a review of the book World Order by Henry Kissinger. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
The first line includes the money I have withdrawn. I withdraw money every month from my portfolio as I am living off my portfolio. In my calculations I am assuming that all the withdrawals occur on June 30 of each year as I withdrawal a similar amount each month.
| Period Covered | To Date | 5 Years | 10 Years |
|---|---|---|---|
| Me - Including Withdrawals | 0.81% | 9.43% | 8.05% |
| Me - Portfolio Only | 0.46% | 9.20% | 8.03% |
| TSX | -1.44% | -0.65 | 1.44% |
| SPY | -4.98% | 10.14% | 5.05% |
I have some 51 stocks and 6 other items. I have a reserve fund in Tangerine. I do not have any medical or dental coverage and this is the reason I need a reserve fund. Also, I use it for large unexpected expenses. I have CIGs in my registered accounts as I have been taking money from these accounts. In these accounts I have cash or near cash and expected dividends that cover me for 5 years of withdrawals. All my investments are shown here.
Even though I have many investment items, there are some 20 stocks that make up some 77% of my total investments. These stocks are shown below.
| No. | Name | TSX | Symbol | Mkt | Symbol | Sub-Index | C |
|---|---|---|---|---|---|---|---|
| 1 | Toronto Dominion Bank | TSX | TD | NYSE | TD | Bank | F |
| 2 | Metro Inc. | TSX | MRU | OTC | MTRAF | Cons Staple | C |
| 3 | Bank of Montreal | TSX | BMO | NYSE | BMO | Bank | F |
| 4 | Canadian National Railway | TSX | CNR | NYSE | CNI | Services | I |
| 5 | Royal Bank | TSX | RY | NYSE | RY | Bank | F |
| 6 | Fortis Inc. | TSX | FTS | OTC | FRTSF | Power | U |
| 7 | TransCanada Corp | TSX | TRP | NYSE | TRP | Infrastructure | U |
| 8 | Power Financial Corp | TSX | PWF | OTC | POFNF | Insurance | F |
| 9 | RIOCAN REIT | TSX | REI.UN | OTC | RIOCF | Real Estate | E |
| 10 | Pembina Pipelines Corp | TSX | PPL | NYSE | PBA | Infrastructure | U |
| 11 | Enbridge Inc. | TSX | ENB | NYSE | ENB | Infrastructure | U |
| 12 | AltaGas Ltd. | TSX | ALA | OTC | ATGFF | Infrastructure | U |
| 13 | Sun Life Financial | TSX | SLF | NYSE | SLF | Insurance | F |
| 14 | Equitable GIC 1 | GIC | B | ||||
| 15 | Canadian Tire Corporation | TSX | CTC.A | OTC | CDNAF | Cons Dis | C |
| 16 | Toromont Industries Ltd. | TSX | TIH | OTC | TMTNF | Construction | I |
| 17 | Manulife Financial Corp | TSX | MFC | NYSE | MFC | Insurance | F |
| 18 | DH Corporation | TSX | DH | OTC | DHIFF | Financial Service | F |
| 19 | SNC-Lavalin | TSX | SNC | OTC | SNCAF | Construction | I |
| 20 | Saputo Inc. | TSX | SAP | OTC | SAPIF | Cons Staple | C |
On my other blog I wrote yesterday about Mullen Group Ltd. (TSX-MTL, OTC- MLLGF)... learn more. Tomorrow, I will write about Home Capital Group (TSX-HCG, OTC- HMCBF)... learn more on Wednesday, March 2, 2016 date.
Also, on my book blog I have put a review of the book World Order by Henry Kissinger. learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
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